OES - Organizational Effectiveness Solutions

A 2012 study by Globoforce indicated that employee engagement is the number one challenge for HR.  Seems pretty obvious right? In other words the number one challenge for HR is ensuring that their employees care about their jobs and are working hard.  I guess they have other priorities too…  I say it in jest, but it is obvious that understanding engagement is fundamental to good HR.

The topic of employee engagement is fairly new to me personally, having only come across the term since I began my MBA at Schulich.  Over the summer it’s become really important to me though so I wanted to talk a bit about what engagement is, why it matters to business and how to increase it.  What the hell is it though, and just as importantly what is it not?

WHAT - Defining Employee Engagement

The first point of note is that academics and industry professionals don’t agree on what employee engagement is.  Here a few definitions from each circle so you get a sense of the differences.

Academic Definitions

Harnessing of organizational members’ selves to their work roles. In engagement, people employ and express themselves physically, cognitively, and emotionally during role performances. – William Khan 1990

Extent to which an individual is psychologically present in a particular organizational role – Alan Saks, 2006

A positive, fulfilling, work-related state of mind that is characterized by vigour, dedication and absorption – William Schaufeli et a.l, 2002

The opposite of burnout: high energy, strong involvement, sense of efficacy at work – Christina Maslach et al., 2001

Industry Definitions

Employee Engagement is a measurable degree of an employee’s positive or negative emotional attachment to their job, colleagues and organization that profoundly influences their willingness to learn and perform at work – Scarlett Surveys, No Date

They love what they are doing, and they look forward to coming to work.  They are passionate about what they do, feel that they are an important part of the big picture and their energy and innovation make their companies not only successful, but competitive as well. – Lee Colan, 2008

Employee engagement is the emotional commitment the employee has to the organization and its goals – Forbes, 2012

The point the academics make is that engagement is a distinctive variable and it is different from other constructs such as organizational commitment, stay intentions, job involvement, job satisfaction, organizational citizenship behavior, discretionary effort and others.  The distinctions are not always absolutely clear or obvious at first glance, and so in practice engagement has turned into the newest buzz word as opposed to a distinct and important construct.  I think the key difference between academics and industry professionals is that academics focus on the tasks and avoid bringing the organization, colleagues or other factors into the picture.  You can be 100% engaged and not care about the organization; I know I have been in that situation. 

Think of the guy who is working furiously with all his energy and emotion on a project, but hates his job, isn’t getting paid enough, doesn’t have a lot of friends and is probably going to quit once this project is done.  He is just really into that project.  Sure, it is rare for someone to love their task and hate their job, but I want to make it clear that engagement is distinctive from other constructs, particularly organizational commitment.  My simplified definition of engagement is: being really into your tasks at work. 

The industry professionals have probably already made engagement into what they want, which is a great buzz word and an umbrella concept that covers everything in management.  Thankfully there are still some serious academic studies going on that make an effort to distinguish engagement and better understand it’s drivers and outcomes.

It requires a membership to HR.com, but this presentation by Paul Fairlie consulting is fantastic in providing a rigorous discussion of engagement from a more academic perspective.

WHY - Business Case for Employee Engagement

Now with all that said, it makes it a little harder to make a strong business case for engagement since I’ve dismissed most the research as being unreliable.  Oh well though, it’s the best we have and it’s fun to talk about!  First of all, engagement numbers are pretty crappy around the world. Give or take a few, only 33% of employees are actively engaged, and 18% are actively disengaged (they aren’t just not helping, they are looking for ways to screw you over).  The rest just show up, do their 9-5 and GTFO.

Forget the numbers for a second, it just makes sense that employees that give it their all are going to provide you with better service, higher quality and innovative ideas.  I think this is incredibly obvious and simple, the rest of the numbers are just gravy.  Check this blog out on the engagement value chain.  The summary version is, treat your employees well, they treat the customers well who will pay and make sure the shareholders get a great return.  In my other post, I wrote about why some executives just don’t understand this concept, and it pretty much comes down to values.

People love numbers though, so let’s talk some fun numbers.

• The US alone is missing out on at least $300 B a year from lost productivity
• Awesome presentation by Hay Group at http://www.hci.org/lib/why-does-employee-engagement-matter-ceos-0#comment-1932 (membership required)

• Molson Coors Brewing Company was able to save $1,721,760 in 2002 in safety costs.  Engaged employees are 5x less likely to be involved in an accident, and 7x less likely to lose sick days compared to disengaged employees – Lee Colan, 2008
• Disengagement, which is a key driver of absenteeism resulted in costs of $500-$700 M a year due to absenteeism for the UK Postal System in the early 2000’s.  Approximately, 10,000/170,000 employees were absent on any given day – Carney, Getz 2009 (Freedom Inc)
• The Gallup institute has done some quality research, but again, not using a clear definition of engagement so surely they are measuring other outcomes

Let’s go back to talking common sense.  A company with great engagement is more likely to have an awesome brand, attract and retain the best talent and generally kick ass.  In an extremely competitive environment, strong people practices provide a great advantage to organizations.  They are extremely difficult to imitate, they don’t cost much (in fact they are investments) and they are generally more ethical.  It’s an absolute win-win.

HOW - How to Increase Employee Engagement

So you get it, you really care and want to improve employee engagement, but don’t know what to do? 

1. Ensure your values are compatible with creating an engaged workplace
2. Help every employee find meaning in their work
3. Other fun HR stuff that won’t matter if 1 and 2 aren’t in place

First, check the organizations values and make sure you aren’t in it just for the money.  Sure, we’ve heard it a million times, businesses exist to create shareholder wealth.  Stop the bs, that is not what they exist exclusively for.  Business creates real value for society, it must, otherwise nobody would be willing to pay.  Capture your organizations mission!  Most importantly though, you need to really care about your employees, believe in their ability and also take a long term view because this is not a quick fix. 

Secondly, make sure the work is meaningful.  Do everything you can to help employees understand the meaning of their work, the social impact of what they do!  That is the single most important driver of engagement.  The only way to make that happen is to first have a clear purpose that goes beyond profits.  Then with passion go out there and share the purpose.  Purpose is the cheapest and most effective way to align your organization.  Even Deloitte gets it, have a look at what Barry Salzberg (Global CEO of Deloitte Touche Tohmatsu Limited) has to say on the power of meaningful work, particularly for the younger generations.

It’s the difference between Starbucks and Tim Horton’s barista.  Don’t get me wrong, there is more skill involved with making those fancy Starbucks drinks, but they are still essentially serving coffee.  Yet, Starbucks employees care way more about you getting good service.  They don’t see their job as serving coffee, it’s about serving customers.

When the janitor at NASA was asked, what do you do for a living? He responded, “I put men on the moon”.  Connect people with your mission!

There are a load of other important stuff you will have to do, such as ensure your compensation programs make sense, that you recruit and retain top talent, provide development opportunities and so on.  It’s not easy, but start with the first two keys.

Also, don’t forget that once you have people engaged they had also better be enabled!  If you didn’t see the chart above by the Haygroup have a look again.  Engagement + Enablement is the real goal!

CONCLUSION

So there you have it.  The term employee engagement is being over utilized by industry, losing meaning to a large extent, but there is some real meat in it.  The academics have a more clear definition which is focused on the task and not the organization.  Disengagement is a HUGE problem with about 66% disengaged or actively disengaged.  With some common sense it is obvious why every organization needs to get off their asses and make sure their employees are engaged, but they can’t do if they don’t have the right values.  Finally, make sure that work is meaningful, connect every employee with the purpose of the organization and then enable them so they can unleash their FULL, fiery potential onto the competition!